Varoufakis: We Have Money To Pay the Public Sector but Not the Debt

Greek Finance Minister Yanis Varoufakis said that Greece will be able to pay its public sector workers but not the debts. He told Alpha Radio:

“We will not have liquidity problems for the public sector. But we will definitely have problems in making debt payments to the IMF now and to the ECB in July.”

While Varoufakis gave no figures, Reuters reports that there are interest payments this month of about EU2 billion, an IMF loan of around EU1.6 billion that matures in March, and about EU7.5 billion for maturing bonds held by the ECB in July and August.

From Varoufakis’s statement, he seems to have made clear where his priorities are when it comes to payments. He also said today that he wants discussion of debt restructuring to begin immediately, and to encompass bond swaps that would “significantly reduce the debt” to official creditors.

Of course, this has caused great consternation among the euro sharks, led by German Finance Minister Wolfgang Schäuble. Commenting on the Eurogroup “agreement” and the list of Greek reforms, he told SWR2 radio:

“The question now is whether one can believe the Greek government’s assurances or not. There’s a lot of doubt in Germany, that has to be understood.”

Earlier in the day, Varoufakis was interviewed by Charlie Hebdo, and compared the European promoters of the bailout to medieval doctors:

“In the Middle Ages doctors prescribed blood-letting to patients that often resulted in a worsening of their condition. Nonetheless, they did it again after that. This is a perfect illustration of the current attitude of the EU—the more austerity policies fail, the more they are implemented.”

“Syriza has been cast to play a role in the upheavals of history with the sad honor of having to repair damage left by the parties and institution of the system.”

He continued by saying that if pro-European governments such as the previous ones of Greece continue to “suffocate the people who elected them and lead them to despair, then the only ones who benefit are the fanatics, racists, nationalists and those who live with hatred.”

In an obvious attack by those who really are making the policy, two of Greece’s four main lenders, Eurobank and Bank of Piraeus, are being dropped from the pan-European STOXX 600 benchmark index, potentially depriving them of investments.